ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON OVERSIGHT

Houghton Announces Hearing on the Use of Private Collection Agencies to Improve IRS Debt Collection

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  Witnesses will include the Honorable Mark Everson, Commissioner of the Internal Revenue Service (IRS), and Nina Olson, the National Taxpayer Advocate.

BACKGROUND:

Each year, the IRS collects over $2 trillion in tax revenue from all sources.  A small percentage of this amount is assessed, but not collected.  The IRS has 10 years to collect newly assessed taxes.  Over the past decade, the total inventory of unpaid tax assessments has more than doubled.  It has grown from $130 billion in 1992 to over $280 billion in March 2003. 

Much of this amount represents tax debts that cannot be collected, due to death or bankruptcy, but the IRS estimates that about $78 billion is collectible.  The amount judged to be collectible has grown by 12 percent during the past 2 years, and the inactive portion that the IRS is not currently pursuing has grown by 38 percent.  As of March, the IRS had identified over $13 billion in tax debts that can only be collected if the IRS has more resources.

The Bush Administration is highly concerned about the growth in the inventory of uncollected taxes, and the IRS issued a Request for Information that appeared in the Federal Register in January 2002 to seek input from private collection agencies (PCAs) on how PCAs could assist the IRS with its collection efforts, while preserving important taxpayer protections in existing law.  Using this information, the Administration developed a proposal that appeared in the fiscal year 2004 budget request for the IRS.  Chairman Houghton introduced legislation (H.R. 1169) that would implement the Administration’s proposal.

In announcing the hearing, Chairman Houghton stated, “We all know that it is a duty of citizenship to abide by the rules and pay our taxes.  Yet, in the event that the rules are not followed, the IRS is unfortunately not able to adequately enforce this obligation due to a lack of funds.  Enforcement is inconsistent at best.  The Administration is looking for innovative solutions to this problem, and I applaud them for it.”

FOCUS OF THE HEARING:

The hearing will focus on the Administration’s proposal to use private collection agencies to support the IRS’s collection efforts and Chairman Houghton’s bill to implement the proposal.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Due to the change in House mail policy, any person or organization wishing to submit awritten statement for the printed record of the hearing should send it electronically to hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to (202) 225-2610, by the close of business, Tuesday, May 27, 2003.  Those filing written statements who wish to have their statements distributed to the press and interested public at the hearing should deliver their 200 copies to the Subcommittee on Oversight in room 1136 Longworth House Office Building, in an open and searchable package 48 hours before the hearing.  The U.S. Capitol Police will refuse sealed-packaged deliveries to all House Office Buildings.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below.  Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1.   Due to the change in House mail policy, all statements and any accompanying exhibits for printing must be submitted electronically to hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to (202) 225-2610, in Word Perfect or MS Word format and MUST NOT exceed a total of 10 pages including attachments.  Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record. 

2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3.  Any statements must include a list of all clients, persons, or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers of each witness.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.